Spekulatius

Pretty good: https://www.instagram.com/stories/litquidity/3603573104472566488?igsh=ZHZ4ZWdnYnFzOGRz Or here:

I don’t think fining Musk is a good idea either, but I think Musk needs to rethink contracts for Starlink specifically due to security concerns. The other part of coin is accelerating Eutelsat as an alternative. Taking away Tesla subsidies should be fair game too since the US has specially targeted car imports and subsidies depend on being manufactured in the USA. There is the readied about Tesla cars manufactured within the EU which should not be treated differently. The boycotts hitting these hard enough anyways.

I think the EU will respond with package that is liked consist of 1) Target tariffs against aerospace products (to level Airbus versus Boeing etc’), Agricultural goods (hitting Mags home base) and maybe a few other product groups 2 ) a stimulus component to shield exporters hit by the recent tariffs 3) something related to hitting big tech. I am not sure what it is, it could be restricting access to some markets, a digital tax or a security component that forces them to operate their European business somewhat independently (similar to utilities or defense cos that are foreign owned) I don’t think the Mag7 stocks will like 3) These are just my guesses based on chatter here there and what makes sense from an EU perspective in my opinion.

This has been underreported. China has now put export controls on rare earth metals - not just the raw materials ,but also finished goods. Pretty much all magnets are made of rare earth metals ( Neodymium etc) nowadays. https://www.reuters.com/world/china-hits-back-us-tariffs-with-rare-earth-export-controls-2025-04-04/ The product parts could be far reaching ans is open for interpretation . I deal a bit with Germanium which was affected by a former export control, and prices have surged quite a bit and some finished goods are unavailable. Export control exceptions are virtually impossible to get because you need to prove that the product is not dual use. Any company doing any business with defense applications or state institutions can pretty much forget about it. Edited just now by Spekulatius

FWIW, the magic tariff formula was applied incorrectly too. You can’t make this up. They probably could have used the jumanji method to create the triff rates. https://www.aei.org/economics/president-trumps-tariff-formula-makes-no-economic-sense-its-also-based-on-an-error/

Is anyone interested in SLB? I checked them out recently and it seems they transform their business in a favorable manner leading to better FCF conversion. I never owned this stock but have followed it forever a bit.

Ironically with the price for crude crashing, the prices at the pump have gone up quite a bit. Looks like refiners should OK then.

Don’t we have more interior things to discuss than this 5 year old COVID-19 crap? Its not like nothing is happening and the disruption we are seeing now are not that dissimilar In term of trade and supply chains.

I think we are going to see a lot of distress in retail. I’m don’t think they know what to do with this tariff whipsaws. Imagine ordering a boat load of stuff and while that stuff is in transit the prices go up 50% due to tariffs. Or you have warehouses full of stuff when tariffs are on and then Trump and tariffs get cancelled ? You wont get the tariffs back and are screwed with overvalued inventory that you need to sell at a loss. This is the stuff that gives supply chain managers nightmares. I ordered a piece of high purity machined copper yesterday and the supplier told me that is the last part they sell at fixed price. Reason is rapidly fluctuating piece and tariffs. The next order will be based on floating commodity prices as is usual with precious metals. Fun times.

Trimmed ABEV, ELV a bit and sold some PM

Maybe so, but a lot of what is happening now is consistent with what Stephen Miran has been writing and I think it makes sense to read what he has written. I think he is the key figure/ mastermind, not Bessent and Lutnick. https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf The key theme here is to bring the USD down. The USD also can’t be the reserve currency for the world any more, which is really related to the USD overvaluation. He claims it’s not inflationary , which I think will prove to be wrong, but what do I know. We are witnessing here a total remake of the world trade financial system, similar 1971 (abandoned gold standard). If correct, there will be a lot of turmoil.

Yes, front running is part of it. I really have no idea what is going to happen, but I think the economy in the near term and maybe medium term (1-2 year out) will be quite rough. If I had a small business, I would put my belt and suspenders on now. Good luck! What products does your business do and markets does your business serve? Some smaller business can do a great, if they can turn around products quickly and be easy to work with.

In all these cases, stocks went down much more than people predicted. It pays to panic early.

It’s seems to me that Doge is leaving defense alone.

I think the tariffs may not be the endgame, it they aren’t a sole bargaining chip either. Tr up wants nothing less than to boost aus manufacturing and for that he need to get the USD exchange rates down. It’s basically rewriting the economic world order which is based on Brettln Wood and then modified under Nixon when he ditched the convertibility of the USD into Gold in 1971. It caused a decade of economic upheaval and rising inflation rate and maybe we will see something similar playing out now. Nixon also made the USD weaker back then. I think we will also see a time f economic unravel with supply and trade being rerouted snd what Trump is doing , is of similar significance. I don’t have any idea how it plays out, but it means USD devaluation, which almost certainly means higher inflation which may be the price to pay to become more self sufficient (in manufacturing and otherwise). It sounds to me like the pain is long term. I think it will also mean a new trade agreement with some nations which may just be the Mar de Largo accord or something similar.

I believe the tariffs or the reaction to tariffs cause s9me weird feeder snd even shortages. For example some copper qualities are hard to get. I think folks have been hoarding Copper front run tariffs. The US does not have much high grade copper resource so copper will be imported no matter what . The same is probably happening with some steel qualities, I think. People may be hoarding them because they now it will get expensive. A steel fabricator I follow said in the CC that the moment Trump announced the tariff, their input costs went up by ~20% which obviously means front running. I think this will settle in but prices most likely remain at higher levels.

Starter in PINS and small adds to many existing positions.

Well maybe we get the cotton and textile industry back, but who is going to provide the cheap labor? We could import the labor from Bangladesh and Vietnam with immigration since they have not much to do at home with these tariffs? Maga for the win!

TSLA is in its own galaxy in how it trades, because bulls and bears don’t agree on the metrics or even narratives that it should trade on.

I very much agree.

If I buy some thing in Target or Walmart, I don’t get ripped off, even though I have a trade deficit with Walmart. I receive goods and services for the little green piece of cotton paper I am giving them. Same it is between countries. If tariffs were that great, why don’t we have tariffs between US states to balance their trade balances. Why not between counties, cities, zip codes? I sort of hate the idea that a town north of me with many stores and business my be ripping me off? Anyways they used the formula here to calculate tariffs. The idea is to balance the trade with each country. https://ustr.gov/issue-areas/reciprocal-tariff-calculations That will be an interesting experiment for sure. Might be time to read up on Smoot Hawley https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act

I don’t think Banks will do that well. In the short term, I expect credit spreads to increase meaningfully. That is not great for banks.

Has anyone watched Bessent interview with Bloomberg today announcing the tariffs. He was expanding defending them and shaking his head the whole time. I mentioned this before, but it is astounding how incompetent this administration in term of economic polices. Communication is also inconsistent. Bessent and Lutnick know better but everyone seems on a tight leash and they just follow Trump‘s instincts as they openly stated.

I think the disruption from this are of similar magnitude than COVID-19 . It’s very hard to see how this end. The only thing that’s clear is that many many things are going to be more expensive. RIP to those that went to Vietnam to circumvent China. 46% tariffs. Ouch!

Good one: